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2019 (7) TMI 805 - MADRAS HIGH COURTTDS u/s 195 - payment of commission charges to overseas agents - disallowance u/s 40(a)(i) - HELD THAT: - As decided in M/S. EVOLV CLOTHING COMPANY PVT LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX [2018 (6) TMI 1324 - MADRAS HIGH COURT] on a reading of Explanation (2) to Section 9(1)(vii), fees for technical services means consideration, including lumpsum consideration for rendering any managerial, technical or consultancy services. In the instant case, the AO has, in the assessment order, accepted that the appellant assessee has paid commission charges to overseas agents. It is not the case of the Assessing Officer that any lumpsum consideration has been made for any specific managerial, technical or consultancy services. On a overall reading of the Explanation, it is apparent that fees for technical services does not contemplate commission which is order specific and computable at a small percentage of the order value. Section 40(a)(i) does not contemplate order wise commission based on the order value. - Decided in favour of assessee.
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